U.S. aid may be too late for USEC plant

Saturday

Oct 29, 2011 at 12:01 AMOct 29, 2011 at 12:31 PM

WASHINGTON - A week after the U.S. Department of Energy announced that it will invest millions of dollars in a proposed uranium-enrichment plant in Piketon, Ohio, supporters of the plant wonder whether the move is too little, too late.

Jessica Wehrman, The Columbus Dispatch

WASHINGTON - A week after the U.S. Department of Energy announced that it will invest millions of dollars in a proposed uranium-enrichment plant in Piketon, Ohio, supporters of the plant wonder whether the move is too little, too late.

It's the latest chapter in a three-year quest by Maryland-based USEC to secure a $2 billion federal loan guarantee to build its American Centrifuge Project in the southern Ohio community.

Last week, the Energy Department announced that although it had not yet approved the loan guarantee, it had decided to foot the bill for up to $300 million in research and development funding for the plant. Department officials said at the time that they hoped the funding would help resolve the technical and financial concerns that have stalled the project's loan-guarantee application. They also emphasized that they support the technology and would like to see it commercialized.

The catch: The department will need congressional approval to spend the money, and time is running out. USEC plans to send out layoff notices and reduce investment in the plant by 30 percent if it doesn't receive the loan guarantee by Tuesday.

Another catch: USEC and the department announced this year that they had reached an agreement to set a November 2011 deadline for USEC to secure funding for the project, which would be located on a former Department of Energy site.

"This is a game of chicken," said Geoffrey Sea of the Southern Ohio Neighbors Group, an organization that has been highly critical of the proposed enrichment plant. "Nobody wants to be the bad guy. This is a game of waiting to see who will terminate this project first."

Energy Secretary Steven Chu acknowledged that congressional approval was "uncertain" in a letter to USEC CEO John Welch dated Thursday.

"Congressional approval of that request on an expeditious basis is critical to continuing work at (the American Centrifuge Project), and is needed to provide the level of funding required to begin the full program of work we have been discussing," Chu wrote.

Welch initially asked Chu to approve some of the money through an administrative action, bypassing what could be a lengthy congressional-approval process. In his letter to Welch, Chu quashed that idea.

By offering a loan guarantee to USEC, the federal government would promise to cover the borrower's debt in the event of a default. The federal government shares the financial risks of projects employing new technologies. Congress has authorized and appropriated money for the loan-guarantee program, but the overall federal program has taken heat in recent days because of a loan guarantee issued for Solyndra, a California solar-energy company that later went bankrupt.

The department's request for money for research and development essentially put the ball in Congress' court. Frustrated lawmakers say it adds an extra step to a process that should be finished.

Rep. Jean Schmidt, R-Loveland, whose district includes Piketon, expressed her frustration in a letter to Chu dated Thursday.

"We are shocked by DOE's inaction on USEC's pending loan guarantee for the American Centrifuge Project," she wrote in the letter, co-signed by Reps. Bill Johnson, R-Marietta; Steve Austria, R-Beavercreek; Steve Stivers, R-Upper Arlington; and Bob Gibbs, R-Lakeville.

"After three years, hundreds of thousands of machine run time and two independent analyses that say the technology is commercially viable, why is the $300 million … program approach better than a conditional commitment?"

A spokesman for Sen. Rob Portman, R-Ohio, meanwhile, said the wait has already gone on too long.

Jeff Albrecht, a Portsmouth businessman who has supported the project, said he believes "that chances are very slim that this is going to work out for USEC."

The Energy Department "won't give a conditional loan guarantee because they think it's too risky for taxpayers, but yet they're going to Congress saying, 'Let's give them $300 million in cash instead,'??" he said.

Sea said that although he opposes this project, he wants to see the site developed. "This community was promised an active development with jobs," he said. "We were promised that years ago, and that clearly is not happening now. So they are holding - and by 'they,' I mean USEC and DOE - are holding this federal site hostage."

jwehrman@dispatch.com

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